Christian Berner Tech Trade

Strong growth in order intake for both business areas and good sales development during the quarter. The strong finish to the year in Energy & Environment confirms the strength of the business area. In the Technology & Distribution business area, earnings were negatively impacted by one-off costs.

Fourth quarter 2024
• Order intake totaled SEK 272.2 (211.6) million, an increase of 28.7 percent.
• Net sales for the fourth quarter were SEK 247.3 (234.9) million, i.e. 5.3 percent growth, whereof 5.6 percentage points organic growth and 0.3 percentage points impact from subsidiaries in foreign currency.
• EBITA totaled SEK 14.1 (15.7) million, down 10.2 percent. The EBITA margin was 5.7 percent (6.7).
• Earnings per share before and after dilution were SEK 0.45 (0.58).
• Cash flow from operating activities was SEK 41.8 (24.4) million. Total cash flow for the period was SEK 15.7 (-7.6) million, including voluntary amortization of SEK 18 (25) million.
• The Board of Directors proposes an increased dividend to SEK 0.95 (0.90) per share.

Significant events in the fourth quarter
• Mattias Lysebring took over as new managing director of the subsidiary Christian Berner AB.

January 1 to December 31, 2024
• Order intake totaled SEK 944.5 (975.2) million, down 3.2 percent.
• Net sales totaled SEK 962.7 (942.8) million, an increase of 2.1 percent.
• EBITA totaled SEK 59.0 (69.5) million, down 15.1 percent. The EBITA margin was 6.1 percent (7.3).
• Earnings per share before and after dilution were SEK 1.96 (2.42).
• Cash flow from operating activities was SEK 104.9 (81.5) million. Total cash flow for the period was SEK 5.0 (14.7) million, including voluntary amortization of SEK 50 (25) million.

Significant events after the end of the reporting period
• There were no significant events after the end of the reporting period.

MESSAGE FROM THE CEO
Growth for the Group and strong finish from Energy & Environment
The year ended with good order intake in both business areas, an increase with almost 30 percent compared to the previous year, and good organic sales growth of 6 percent. Thus, seen over the full year, uninterrupted growth since 2020. Energy & Environment continues strong development, with earnings in the quarter as much as 87 percent higher than last year. Transitions in Technology & Distribution again resulted in some costs in the fourth quarter, but now allow us to begin 2025 with a lower cost level. The underlying EBITA result in the quarter was 17 percent above the previous year, corresponding to a 7.4 percent margin.

The past year started with slower markets. We have been able to use the time to transition the organizations, especially in Technology & Distribution, and to further strengthen our balance sheet. Our cash flow from operating activities increased by 29 percent during the year, giving us an impressive cash generation of 200 percent (calculated as the ratio between cashflow from operating activities and EBIT) – a sharp increase from 63 percent in 2022. We have now the engine in place, just as we are starting to see brighter days in some of the segments that have had a bit of a rough time for most of 2024. Order intake in the fourth quarter was as much as 29 percent higher than in the same period last year and 10 percent higher than the sales for the quarter, a prerequisite for growth. Already in the third quarter we saw an increase in quotations in several of our areas, which sustains, and has now materialized in an increased order intake. Of course, we want to see more quarters of consistent growth in order to feel confident in the turn, and not all parts are at full speed yet. However, the aggregate momentum of this quarter feels promising.

First three years
Since the new strategic direction was decided 2,5 years ago we have completed the first steps. The first period, in autumn 2022, focused on strengthening governance and control in the organization, as well as reorganizing into new business areas to enable decentralization efforts. The following year, decentralization was initiated by bringing central functions back to the companies – finance, marketing and, most recently this spring, IT. The main purpose of decentralization has been to unleash the entrepreneurial power of the organization and remove unnecessary internal administration, but a secondary purpose has of course been to clarify what works well and what we need to work on. With fewer cost allocations and internal inter-billing obscuring the view, we are creating the conditions and understanding for the efforts we made in 2024, in parallel with the completion of decentralizing the last central functions. As can be seen from the figures, the restructuring work during the year has also given rise to some restructuring costs during the year, primarily in Technology & Distribution, totaling approximately SEK seven million, of which just over four million in the quarter. We are now starting to uncover the fantastic businesses under the hood, which the excellent cash generation figures above bear proof of. However, above all we are proud of the continued confidence of our customers that is reflected in the order intake figures.

Long term focus
The aim of cash generation is, of course, to be able to invest in growing our great companies and to add new great operations to them. We have a wishlist of companies we like, and have the advantage of being able to take a long-term view and wait for exactly the companies we want. Our financing is flexible, which is why we have taken the opportunity to reduce our borrowing (and thus interest costs) during the year when interest rates were high, in order to be able to increase borrowing again when we need to finance acquisitions. Having long-term owners gives us the space to think in longer cycles and systematically build for the future. Together with our great people, we have laid the foundation for long term value creation.

Caroline Reuterskiöld
President and CEO Berner Industrier AB